Australian banks may be making multi-billion-dollar profits, but today they learned they will also have to pay out billions after losing the country's longest-running court case.

Appeal judges in the West Australian Supreme Court upheld a ruling that the lending banks have to pay creditors of Alan Bond's Bell Group, which collapsed in 1991.

Creditors had filed the action against Australian and foreign banks, claiming they had lent money to Bell when they knew it was insolvent.

Today's ruling backs a decision that the banks were liable to pay the value of the group's assets, plus interest.

But the appeal judges have substantially increased the amount from $1.6 billion to more than $2 billion.

The banks include Westpac, the Commonwealth, HSBC Australia and more than a dozen institutions based overseas.

After Bell collapsed, the banks seized assets worth $280 million.

The creditors had been seeking that, plus interest.

"What's important is that in 2008, after the longest trial in this state's history, the Supreme Court delivered a 2,600-page judgment against the banks ordering them to pay $1.6 billion to Bell," said Bell Group liquidator Tony Woodings.

"Today the full court has endorsed that, and in fact increased the amount the banks have to pay.

"I invite the banks to now take the decision, accept it and allow the process of distribution to commence."